Wary SA unions 'wait and watch'

27 May 2009

The MTN-Bharti Airtel plan to create one of the top 10 telecommunication operators in the world has been inspirational news for the sagging markets as well as investors, but not for the workers who are directly affected with this mega deal.

South Africa's powerful federation of trade union, Congress of South African Trade Unions, (COSATU) has already expressed its concerns over the proposed deal.

''We remain concerned about the loss of South African control of another important company. MTN-Bharti deal involves the pursuit of 'synergies', it's likely to involve job cuts either here or in India - and given the lower cost base in India, the location of the cuts is pretty obvious,'' COSATU spokesman Patrick Craven said in an interview to a South African website.

"However, looking at the deal, it's not on the same scale as the Vodafone-Vodacom deal. MTN never had a big public stake. There was a 50-per cent public stake in Vodacom, so the deal won't mean any loss of public control.

"That said, we shall monitor the situation with great interest. If Bharti should seek a bigger proportion, for example, we may object strongly, it would mean a whole industry slipping out of South African control and accountability."

The Communications Workers' Union has not yet made any comments on the deal; according to secretary-general Gallant Roberts, the organisation is waiting for more information about the deal.